Gift card? No, more like a plastic coupon

Donna Harris covers automotive retailing for Automotive News.
This week I wrote that though gift cards top consumers’ Christmas wish lists, you typically don’t see proprietary gift cards offered at car dealerships.

Banks offer dealers gift-card programs, but most dealerships haven’t successfully incorporated the concept, says Eric Seiler, vice president at Huntington Bank’s dealer services division.

When they do offer a proprietary gift card, it’s generally used more like a plastic discount coupon. Kevin Sage, with credit card processing company First Data in Indianapolis, says the following two approaches are most effective for an auto retailer:

• Give away a gift card for a fixed amount with every new-vehicle purchase. The card is good toward the first service visit.

• Hand out a gift card as a make-good award. For example, the shop fails to have a service customer’s car ready when promised. The dealership gives the customer a gift card that can be applied toward the next service to apologize for the inconvenience.

“The name of the dealership is on the card and it’s sitting in the customer’s wallet,” Sage says. “It’s subliminal advertising. Every time customers look in their wallets, there’s the logo of the car dealership. The next time they need an oil change they might go there instead of Jiffy Lube.”